Petrol prices will drop this week thanks to rand recovery

Happy rand, happy country

Petrol prices will tank in South Africa this week, as the rand continues its fine run of form against other international currencies.

It has been trading at a three-year best against the US Dollar. Investors are regaining confidence in SA, due to the imminent exit of Jacob Zuma and Cyril Ramaphosa’s “business-friendly” message for his leadership of the country.

How much does petrol cost in South Africa?

The Energy Department has announced a decrease in the fuel price this Wed. Motorists will pay 30 cents less for petrol, while diesel will be 17 cents cheaper per litre. Illuminating paraffin is also down by 19 cents while LP gas will trade at 23 cents less per kilogram.

The Department of Energy issued a statement on Monday morning explaining users at the pumps can now expect to pay 30c less for every litre:

“The Rand appreciated, on average, against the US Dollar (from 13.23 to 12.20 Rand per USD) during the period under review. This led to a lower contribution to the Basic Fuels Price (i.e. the import parity price) on petrol, diesel and illuminating paraffin by 52.85c/l, 54.66c/l and 54.88c/l respectively.”

Why have Petrol Prices dropped?

The Department also cited the rise in a crude oil prices as having an effect on the decrease. Although that doesn’t sound beneficial, it has prompted OPEC Ministers and oil superpower Iran to demand lower tariffs. This suggests oil is going to get cheaper in the near future, thus we have a price drop.

South Africa imports both crude oil and finished products at a price set at the international level. This also includes shipping costs.

Petrol Prices have rose dramatically throughout 2017, culminating in the highest rates in South African history at R14.76 in December. However, drivers will now be relieved to see costs moving in the right direction.